United States District Court, M.D. Florida, Orlando Division
E. MENDOZA, UNITED STATES DISTRICT JUDGE.
CAUSE is before the Court on Plaintiff's Renewed Motion
to Compel Return of Inadvertently Produced Documents, and
Motion for Sanctions (“Motion to Compel, ” Doc.
67), and Plaintiff's Motion to Disqualify
[Defendant's] Counsel, and Motion for Sanctions
(“Motion to Disqualify, ” Doc. 29). United States
Magistrate Judge Karla R. Spaulding issued an Order (Doc.
70), granting the Motion to Compel, to which Defendant has
filed an Objection (Doc. 81). Judge Spaulding also issued an
Amended Report and Recommendation (“R&R, ”
Doc. 106), recommending that the Court grant the Motion to
Disqualify but deny the request for monetary sanctions, to
which Defendant also filed an Objection (Doc. 109). Plaintiff
did not object to either.
alleges that she was injured when she was struck by an
automobile operated by non-party Priscilla Condemarin. (Am.
Compl., Doc. 14, ¶ 6). At the time, Condemarin was
insured by Defendant. (Id. ¶ 4). The insurance
contract at issue had bodily injury liability limits of $10,
000.00 per person and $20, 000.00 per occurrence.
(Id. ¶ 5). According to Plaintiff, in December
2007, Defendant advised Plaintiff's attorney at the time,
Michael Sutton, that it intended to tender the full $10,
000.00 policy limits. (Id. ¶ 9). Sutton made
note of this conversation in his case management software and
included his mental impressions regarding whether any such
check should be returned. (Hr'g Tr., Doc. 107, at
92:3-11; see also Second Am. Privilege Log, Doc.
67-10, at 3 (Dec. 17, 2007 entry)). Despite Defendant's
representation that it would tender the policy limits, it did
not do so. (Doc. 14 ¶ 9). Therefore, Plaintiff filed
suit against Condemarin (the “underlying
litigation”) and obtained a judgment in the amount of
$3, 022, 991.65. (Id. ¶¶ 10, 14; Am. Final
J., Doc. 14-3, at 1). In August 2008, during the pendency of
the underlying litigation, Defendant finally tendered the
$10, 000.00 to Plaintiff, which she rejected, allegedly due
to Defendant's failure to timely resolve the claim. (Doc.
14 ¶ 12-13). After obtaining the excess judgment,
Plaintiff filed this case, asserting one claim of “bad
faith”-i.e., that Defendant breached its duty of care
under the insurance contract. (Id. ¶¶
the time that Defendant tendered the policy limits to
Plaintiff, Plaintiff's underlying attorney, Sutton,
consulted with one of Plaintiff's current attorneys, Fred
Cunningham, regarding the viability of Plaintiff's bad
faith claim. (Doc. 107 at 36:21-37:12). They had several
phone consultations. (Id. at 36:21-23). To enable
Cunningham to provide a useful assessment, Sutton sent a
letter and attached documents to Cunningham, including a
timeline of events created by Sutton. (Id. at
41:12-20; Sutton Aff., Doc. 67-12, ¶ 30). During the
calls with Cunningham, Sutton made handwritten notes,
documenting Cunningham's mental impressions regarding
Defendant's handling of the underlying claim and the
viability of a bad faith claim. (Doc. 67-12 ¶¶ 17,
23, 65). Sutton also sent Plaintiff a letter, which discussed
the strategy moving forward with the bad faith case,
Sutton's assessment of the likelihood of success in the
bad faith litigation, and a summary of Sutton's
understanding of Cunningham's assessment of the
likelihood of success. (Id. ¶ 27). Sutton also
made notes containing the substance of his conversations with
Cunningham, including Cunningham's assessment of the
viability of the bad faith claim and advice regarding
strategy, in his case management software. (Id.
¶¶ 40, 42, 43, 47, 55, 56, 59). After Sutton
received the check for the policy limits, Sutton sent an
e-mail to his legal assistant and his paralegal with
directions to return the check, which included notes
pertaining to the underlying liability. (Doc. 67-10 at 5)
the pendency of discovery in this case, Defendant sent
Plaintiff a Request to Produce (“RTP, ” Doc.
67-1). Included in the RTP was a request for the underlying
litigation file (the “Sutton File”), which one of
Plaintiff's attorneys, Greg Yaffa, agreed to obtain from
Sutton and to produce. (Yaffa Aff., Doc. 67-5, ¶ 6; Doc.
107 at 94:4-9). In so agreeing, Yaffa stated that he would
remove all privileged documents from the file and produce it
along with a privilege log. (Doc. 67-5 ¶ 6).
Plaintiff's response to the RTP also stated “It is
anticipated that documents responsive to this request will be
contained in the underlying litigation files . . . . These
files are not currently in the Plaintiff's possession and
it is anticipated that the responsible parties will prepare a
privilege log relating to said files.” (Pl.'s Resp.
to RTP, Doc. 67-2, at 2). Plaintiff's law firm, Domnick
Cunningham & Whalen (the “Cunningham Firm”)
received the Sutton File around December 16, 2015.
(See Dec. 16, 2015 through Jan. 20, 2016 E-mail
Chain, Doc. 67-3, at 4). It was contained in nine
bankers' boxes, consisting of over 17, 000 pages.
(Id.; Doc. 67-5 ¶ 16). The Sutton File included
all of the above-referenced notes and correspondence created
by Sutton. (See generally Doc. 67-10). Upon receipt,
Yaffa contacted Amanda Kidd, an associate attorney with
Defendant's law firm, regarding the specifics of the
production of the Sutton File. (Doc. 67-3 at 4). In a follow
up e-mail, Yaffa again confirmed that he would “produce
all of the non privileged documents” in the Sutton
File. (Id. at 3).
assistant at the Cunningham firm, Laura Sabbatino, sent the
Sutton File to a copy service to have it copied and bates
stamped. (Sabbatino Aff., Doc. 67-6, ¶¶ 8-9). When
Sabbatino received the file back, the attorneys discovered
that the service failed to bates stamp it. (Id.
¶ 11). Sabbatino then re-sent the Sutton File to the
copy service. (Id. ¶ 12). She received the
bates-stamped file back from the copy service on January 13,
2016. (Id. ¶ 16). During this time, Sabbatino
was contacted at least twice by a legal assistant at
Defendant's law firm, Young, Bill, Boles, Palmer &
Duke, P.A. (the “Young Firm”), regarding when the
Young Firm could expect delivery of the Sutton File.
(See Doc. 67-3 at 1, 2). Sabbatino, who, although
otherwise an experienced legal assistant, was new to the
Cunningham Firm, felt that the production of the Sutton File
was delinquent and that she needed to expedite its delivery
to the Young Firm. (Doc. 67-6 ¶¶ 2-5, 18).
Therefore, Sabbatino drafted a cover letter for her own
signature, rather than one of the attorneys' signatures,
and sent a CD containing an electronic copy of the entire
Sutton File to the Young Firm via overnight mail.
(Id. ¶¶ 18, 20). Sabbatino did not copy
any of the attorneys at the Cunningham Firm on her
communications regarding the production of the Sutton File,
nor did she advise the attorneys that she had sent the file.
(Id. ¶¶ 13-15, 20, 22; Doc. 67-5 ¶
21; Cunningham Aff., Doc. 67-4, ¶¶ 21-22; see
also Doc. 67-3 (exhibiting that no attorneys at the
Cunningham Firm were copied on Sabbatino's e-mails with
the Young Firm regarding the production of the Sutton File)).
Indeed, after Sabbatino's production of the Sutton File,
attorneys at the Cunningham Firm continued to work on the
file, reviewing documents and starting a privilege log. (Doc.
67-4 ¶¶ 19-20; Doc. 67-5 ¶¶ 18-19).
the Young Firm received the file, the electronic documents
were placed on the firm's internal server. (Doc. 107 at
99:19-21). Kidd accessed the file and did a “scrolling
review” of all the documents, viewing every document in
the Sutton File and selecting certain folders to be printed
for a more thorough review. (Id. at 99:24-100:7;
Kidd Dep., Doc. 97-1, at 23:21-24:4).Kidd observed that there was
no privilege log provided with the Sutton File. (Doc. 107 at
138:21- 139:1). She also recognized that the Sutton File
included documents over which privilege could have been
asserted. (Id. at 126:13-14). In fact, Kidd
testified that she was “surprised” and thought it
was “unusual” that the Cunningham Firm would
produce such documents, but she did not think the disclosure
was inadvertent. (Id. at 126:4-7; Doc. 97-1 at
the documents Kidd reviewed in depth was Sutton's
December 2007 case notes made after his call with Defendant,
where Defendant advised that it would tender the policy
limits; the note included Sutton's opinion regarding
whether Plaintiff should return any such tendered check.
(See Doc. 97-1 at 33:20-34:1). Kidd believed the
note was relevant to Defendant's affirmative defense that
Plaintiff was unwilling to settle her claim, (see
Doc. 107 at 135:18-136:5), and Kidd advised her supervising
attorney, Richard Young, of the contents of these notes and
provided him with a copy, (Doc. 97-1 at 33:20-34:1; Young
Dep., Doc. 97-2, at 35:15-36:12). Young was in the midst of
three back-to-back trials at the time, and therefore, he did
not give these documents his full attention. (Doc. 97-2 at
20:15-19). Kidd also sent at least one document to
Defendant's representatives via e-mail. (Doc. 97-1 at
36:12-21). In addition, such information was discussed
between Young, Kidd, and Defendant's representative in
the context of whether to accept a settlement offer from
Plaintiff. (Doc. 97-2 at 31:20-32:1).
on the documents in the Sutton File regarding Sutton's
consultation with Cunningham, Kidd determined that Cunningham
was a potential witness in this case. (Doc. 107 at 128:5-13).
Kidd believed Cunningham had information regarding
Plaintiff's willingness to settle the underlying case and
her reasons for rejecting the policy limits. (Id.).
On March 15, 2016, the Young Firm sent a request to the
Cunningham Firm to conduct the deposition of Cunningham.
(Doc. 67-4 ¶ 21; Doc. 67-5 ¶ 20). It was this
request that first notified any attorney at the Cunningham
Firm that the full Sutton File had been produced. (Doc. 67-4
¶¶ 21-22; Doc. 67-5 ¶¶ 20-21). Cunningham
and Yaffa immediately called the Young Firm, asking for Kidd
or Young. (Doc. 67-4 ¶ 24-25; Doc. 67-5 ¶¶
23-24). When neither were available, a message was left.
(Doc. 67-4 ¶ 25; Doc. 67-5 ¶ 24). The next day,
when neither Kidd nor Young had returned the call, Cunningham
sent the Young Firm a letter, transmitted via e-mail,
advising the Young Firm that the Sutton File was
inadvertently disclosed and demanding its immediate return,
which would be replaced by a file with the privileged
information removed and a privilege log. (Doc. 67-4 ¶
26; Doc. 67-5 ¶ 25; Mar. 16, 2016 Letter, Doc. 67-7).
next day, Kidd responded via e-mail stating that she and
Young were out of the office and requesting five days to
respond to the letter. (Mar. 17, 2016 E-mail Chain, Doc.
67-8, at 1). Cunningham responded that he was concerned about
“being accused of not acting immediately when we became
aware of the inadvertent disclosure.” (Id.).
Kidd responded, “This is not an issue. You are
obviously acting immediately and I am not disputing
March 22, 2016, Kidd sent a letter to the Cunningham Firm,
refusing to return the Sutton File, but agreeing to sequester
them, stating: “[A]s an officer of the court and in the
spirit of good faith, we will agree to not review or utilize
the documents for a sufficient length of time so that the
court can determine whether production of over 17, 000 pages
without a privilege log is considered to be a waiver.”
(Mar. 22, 2016 Letter, Doc. 67-9, at 1). Thereafter, Kidd
filed a motion to compel the deposition of Cunningham. In
that motion, Kidd referenced and quoted information contained
in the documents that were subject to
sequestration. Two weeks after the Cunningham Firm
demanded the return of the Sutton File, it produced a
privilege log to the Young Firm. (See Doc. 97-1 at
63:10-15 (agreeing that Plaintiff produced a privilege log on
the day that her first motion to compel was filed); Doc. 27
(exhibiting that Plaintiff's first motion to compel was
filed on March 29, 2016)).
Standard of Review
objections to the Magistrate Judge's Order are reviewed
under the “clearly erroneous” or “contrary
to law” standard. Fed.R.Civ.P. 72(a); Hallford v.
Allen, No. 07-0401-WS-C, 2007 WL 2570748, at *1 (S.D.
Ala. Aug. 30, 2007) (citing additional authority). The
objected-to portions of the R&R are reviewed de
novo. 28 U.S.C. § 636(b)(1); see also Fed.
R. Civ. P. 72(b)(3).
Motion to Compel Return of Documents
parties agree that Plaintiff has established a prima
facie case of privilege for all of the items listed on
the Second Amended Privilege log. Plaintiff asserts that
Defendant should be required to return all of those
documents. Defendant argues that it should not be compelled
to do so because Plaintiff waived any privilege or protection
and that the work product protection does not apply in bad
faith cases to the type of documents at issue here. Each
argument will be addressed in turn.
Waiver by Disclosure
argues that Plaintiff's disclosure of privileged
information waived any privilege or protection. Federal Rule
of Evidence 502(b) provides that when a disclosure is made in
a federal proceeding, it “does not operate as a waiver
. . . if: (1) the disclosure is inadvertent; (2) the holder
of the privilege or protection took reasonable steps to
prevent disclosure; and (3) the holder promptly took
reasonable steps to rectify the error, including (if
applicable) following Federal Rule of Civil Procedure
26(b)(5)(B).” Judge Spaulding determined that Plaintiff
satisfied all three elements, and therefore, Plaintiff's
inadvertent disclosure did not constitute a waiver. Defendant
Spaulding found that the disclosure was inadvertent because
it was clearly a mistake and there was no evidence that
Plaintiff intended to waive her privileges. Rule 502 does not
define inadvertence. Some courts take a common-sense
approach, “essentially asking whether the party
intended a privileged or work-product protected document to
be produced or whether the production was a mistake.”
Thermoset Corp. v. Bldg. Materials Corp. of Am., No.
14-60268-CIV, 2015 WL 1565310, at *8 (S.D. Fla. Apr. 8, 2015)
(quotation omitted). Others continue to use
pre-502 factors, “including the total number
of documents reviewed, the procedures used to review the
documents before production, and the actions of the producing
party after discovering that the documents had been
produced.” Id. The Court agrees with Judge
Spaulding that, in this situation, incorporating the pre-502
considerations is unnecessary because they are adequately
addressed under the other 502 factors. See Fed. R.
Evid. 502 Advisory Committee's Note to 2008 Amendment
(noting that while Rule 502(b) “is flexible enough to
accommodate any of [the pre-502] factors, ”
“[t]he rule does not explicitly codify that test,
because it is really a set of non-determinative guidelines
that vary from case to case”).
Court also agrees with Judge Spaulding that the evidence
indicates that Plaintiff did not intend to waive her
privileges. Defendant asserts that this determination was
erroneous, but its arguments are somewhat confusing.
Defendant argues that, overall, Plaintiff was not diligent in
producing the Sutton File, and therefore, somehow, that delay
exhibits an intention to disclose and waive privileged
information. First, Defendant skews the facts. While
Defendant correctly asserts that the Sutton File was not
produced for 120 days after the formal request for
production, Defendant ignores the fact that the Sutton File
was not in Plaintiff's possession and that Defendant
agreed to extensions of time. Second, Defendant fails to
explain how a delay in producing documents evidences an
intent to disclose privileged materials.
Defendant asserts that Plaintiff's disclosure of over 17,
000 pages without a privilege log or an indication of
asserting a privilege evidences that Plaintiff intended to
waive her privilege. Defendant is incorrect that Plaintiff
gave no indication that it was intending to assert any
privileges-in the communications between counsel leading up
to the production, Plaintiff's counsel referenced
creating a privilege log and asserting privileges with regard
to the Sutton File at least twice. Second, the mere fact that
the documents were disclosed without a privilege log does not
indicate that Plaintiff intended to waive her privileges
under the specific circumstances here; it is undisputed that
Sabbatino incorrectly disclosed the documents without
consulting her supervising attorneys. Moreover, the attorneys
were in the process of reviewing the Sutton File for the
purpose of creating a privilege log at the time Sabbatino
sent the file to Defendant and continued to do so after the
disclosure, indicating that Plaintiff's attorneys were
not aware of, nor did they intend, such disclosure.
Defendant's focus on the narrow fact that a privilege log
did not accompany the file without explaining the context of
the disclosure ignores the forest for the trees.
Defendant asserts that Sabbatino's Affidavit and
Yaffa's Affidavit contradict one another. They do not.
Sabbatino avers that there were delays in obtaining a
bates-stamped version of the Sutton File and that
Defendant's counsel's office was repeatedly
contacting her, inquiring as to the status of the file. As a
result, Sabbatino felt rushed and pressured to produce the
file quickly. Yaffa avers that, in his opinion, there was no
rush to produce the file because of the agreed extensions of
time and the fact that the discovery deadline was in the
distant future. These statements merely express the opinions
and experiences of each individual. Both Yaffa and Sabbatino
also agree that they did not discuss the status of the Sutton
File at the time. Therefore, it is entirely reasonable that
Sabbatino, who was new to the office, felt rushed to produce
the file while Yaffa, and experienced litigator who was not
copied on the e-mails from Defendant's firm inquiring as
to the status of the Sutton File, did not.
Defendant has not established that Judge's
Spaulding's determination that Plaintiff's disclosure
was inadvertent was clearly erroneous or contrary to law.
Reasonable Steps to Prevent Disclosure
undisputed that Plaintiff's law firm implemented the
following procedure to avoid disclosure of privileged
materials: once a bates stamped copy of the underlying
litigation file is obtained, an assigned attorney will review
the file and prepare a privilege log; then, prior to
transmitting the file to opposing counsel, an attorney must
conduct a final review and sign the transmittal letter,
confirming that what is being disclosed is appropriate. (Doc.
67-4 ¶ 9; Doc. 67-5 ¶ 7; Doc. 67-6 ¶ 8). Judge
Spaulding determined that this procedure constituted
reasonable steps to prevent disclosure. Defendant objects to
first argues that there is no evidence that Sabbatino knew of
the procedure prior to this incident or whether she had
deviated from such procedures previously. Sabbatino makes
clear in her Affidavit that she is familiar with the
above-referenced procedure. Although she does not expressly
state that she was aware of this procedure prior to this
incident, it is certainly implied in the context of her
statements. (See Doc. 67-6 ¶¶ 9, 19
(noting that she was “[a]ttempting to follow” the
firm's procedure and that she “forgot that
privileged documents needed to be removed” from the
Sutton File)). Other than pure speculation, Defendant has
provided no basis for this Court to question Sabbatino's
sworn Affidavit. Further, contrary to Defendant's
argument, there is testimony that indicates that Sabbatino
had not engaged in this type of behavior previously; both
Yaffa and Cunningham aver that in the twenty-four years and
twelve years, respectively, that each has been litigating bad
faith claims with Plaintiff's law ...